Lakeland Industries, Inc. Enters into Amendment No. 4 to Loan Agreement with Bank of America, N.A
April 02, 2024 at 05:18 pm EDT
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Lakeland Industries, Inc. announced on March 28, 2024, the company entered into Amendment No. 4 to Loan Agreement by and between Bank of America, N.A. (the Lender) and the Company (the Fourth Amendment). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Fourth Amendment.
Pursuant to the Fourth Amendment, the Lender and the Company agreed to, among other things, extend the expiration date of the credit facility to March 28, 2029, increase the availability under the revolving credit facility to $40.0 million with an accordion feature providing for the potential funding of an additional $10.0 million, remove the borrowing base component of the credit facility; and modify the interest rate based on Daily SOFR plus the Applicable Rate. The Applicable Rate is based upon a Funded Debt to EBITDA Ratio and includes four different levels constituting a SOFR margin range from 1.25% to 2.00%. In addition, the Fourth Amendment modified the Funded Debt to EBITDA Ratio covenant so as not to exceed 3.5x (with step-downs to 3.25 and 3.0 in 2025 and 2026), modified the Basic Fixed Charge Coverage Ratio covenant to a minimum of 1.20x, includes a springing Asset Coverage Ratio covenant of at least 1.10x, but only to the extent that the maximum Total Leverage Ratio exceeds 3.00x at any reporting period, increases the sublimit for letters of credit to $10.0 million, and imposes a floor to Daily SOFR of 1.00%.
The Fourth Amendment provides for additional indebtedness or the assumption of existing indebtedness for acquisitions of foreign subsidiaries (not to exceed $10.0 million in USD) and increased the size of Permitted Acquisitions, without prior approval from the Lender, to $17.5 million per occurrence and $35.0 million in the aggregate. The Fourth Amendment also provided for the reaffirmation of representations, warranties and covenants under the Loan Agreement as are customary in connection with similar amendments of credit documents.
Lakeland Industries, Inc. design and manufactures and sells a comprehensive line of industrial protective clothing and accessories for the industrial and public protective clothing market. The Companyâs product categories include limited use/disposable protective clothing, high-end chemical protective suits, firefighting and heat protective apparel, durable woven garments, high visibility clothing, and glove and sleeves. Its products are sold by its in-house customer service group, its customer service group, and independent sales representatives to a network of over 1,600 North American safety and mill supply distributors. It also designs and manufactures helmets for the structural firefighting, wildland firefighting, and rescue markets. Its authorized distributors supply end users, such as integrated oil, chemical/petrochemical, automobile, steel, glass, construction, smelting, heavy and light industry, cleanroom, janitorial, pharmaceutical, and technology electronics manufacturers.
LAKELAND INDUSTRIES, INC. 
